Loan-to-Value (LTV) Explained (2026): The Bands That Price Every Mortgage
One percentage controls your rate more than anything else you can influence. How LTV is calculated (at purchase and remortgage), why crossing a band boundary moves your payment by thousands, the buy-to-let LTV rules, and the practical ways to drop into a cheaper band.
Sitting just above a band boundary?
76% instead of 75%, 81% instead of 80% — a small overpayment or the right valuation can drop your whole mortgage into cheaper pricing. A whole-of-market broker runs the maths free.
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Quick answer
Loan-to-value is your mortgage as a percentage of your property’s value — and it’s the single biggest price lever in the mortgage market. The formula: loan ÷ property value × 100. Borrow £190,000 against a £200,000 home and you’re at 95% LTV (a 5% deposit); borrow £120,000 against the same home and you’re at 60%. Lenders price in bands — 60%, 75%, 80%, 85%, 90%, 95% — with every step down buying a cheaper rate, because more equity means less lender risk: on a £200,000 loan over 25 years, the gap between typical 95% and 60% pricing runs to roughly £115 a month, or ~£7,000 over a five-year fix. Three working rules do most of what this page teaches: (1) at remortgage, LTV is recalculated — current balance divided by current value, so years of repayments plus house-price growth routinely drop remortgagors one or two bands without them noticing they’ve earned it; (2) band boundaries are cliffs, not slopes — 76% prices as the 80% band, so a modest overpayment or a defensible valuation that gets you to 75.0% reprices your entire loan; and (3) buy-to-let runs its own ladder — 75% is the standard, 80% is widely available, 85% exists at specialist pricing, and 90%+ essentially doesn’t, with the rental stress test often capping borrowing below the headline LTV anyway. Everything worked through below. Position as of July 2026.
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In this guide
How to calculate LTV — and what deposits buy
The arithmetic takes ten seconds: divide what you’re borrowing by what the property is worth, multiply by 100. Buying a £250,000 home with £25,000 down means borrowing £225,000 → 225,000 ÷ 250,000 = 90% LTV. The deposit and the LTV are mirror images — which makes the ladder easy to hold in your head:
| Deposit (on £250,000) | You borrow | LTV band | Who’s typically here |
|---|---|---|---|
| 5% — £12,500 | £237,500 | 95% | First-time buyers, low-deposit schemes |
| 10% — £25,000 | £225,000 | 90% | FTBs with savings or family gifts |
| 15% — £37,500 | £212,500 | 85% | Second-steppers, savers |
| 20–25% — £50,000–£62,500 | £187,500–£200,000 | 75–80% | Movers with equity, landlords |
| 40% — £100,000 | £150,000 | 60% | Equity-rich remortgagors — the best-rate tier |
One detail that matters more than people expect: the “value” is the lender’s figure, not yours — at purchase it’s the lower of price and the mortgage valuation (a down-valuation raises your effective LTV overnight), and at remortgage it’s the current valuation, which is where the good news usually lives (below).
The bands — and what they actually cost
Lenders don’t price LTV continuously; they price it in steps, each with its own rate table, because equity is their protection: at 60% LTV a property could lose a third of its value before the loan is exposed, while at 95% a small dip does it — and the pricing tracks that risk faithfully. An illustrative ladder on £200,000 over 25 years (rates indicative — the shape is the lesson, and current pricing moves with the Bank of England base rate):
| Band | Illustrative rate | Monthly (£200k/25yr) | vs 60% band |
|---|---|---|---|
| 60% | ~4.4% | £1,100 | — |
| 75% | ~4.6% | £1,123 | +£23/mo |
| 85% | ~4.9% | £1,158 | +£58/mo |
| 95% | ~5.4% | £1,216 | +£116/mo → ~£7,000 per 5-yr fix |
Two readings: high-LTV borrowing is still good borrowing (waiting years to save a bigger deposit while paying rent usually costs more than the band premium — the affordability maths and repayment tables put numbers on your case); and the ladder is why every pound of equity you gain is quietly earning a return — it’s marching you toward the next repricing.
Band cliffs: the 1% that moves everything
The market’s best-kept simple secret: 76.0% LTV prices off the 80% table; 75.0% prices off the 75% table. Cross the line by a hair and your entire loan reprices — which turns small actions into outsized wins around boundaries. The levers: a targeted lump-sum overpayment before remortgaging (paying £2,000 to drop from 76% to 74.9% can be worth several times that over the next fix — the highest-ROI overpayment there is); evidencing your true value at remortgage (if the lender’s automated valuation lags your street’s sold prices — checkable against the ONS House Price Index and Land Registry — a physical valuation appeal with comparables sometimes finds the band for free); borrowing slightly less when a purchase lands just over a line; and at the other end of the journey, topping a deposit by a gift that turns 91% into 90%. A broker checks boundary proximity as a reflex; borrowers going direct routinely pay the higher band for want of £1,500.
Boundary maths is free money — when someone runs it
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LTV at remortgage: the recalculation that pays
The question the searches ask — “how is LTV calculated when remortgaging?” — has a happy answer: current mortgage balance ÷ current property value. Both numbers have usually moved in your favour: five years of repayments on a £200,000 loan clears roughly £20,000–£25,000 of capital, and even modest house-price growth compounds on top — so the buyer who started at 90% frequently remortgages at 75–80% without a single deliberate act, unlocking one or two bands of cheaper pricing. That’s the structural reason remortgaging beats lapsing onto a reversion rate even when headline rates haven’t fallen: your band has. Practical notes: the lender’s remortgage valuation (often automated) sets the value, so know your street’s recent sold prices before accepting a lowball; a pre-remortgage overpayment is the boundary lever above; and the whole sequence — timing, valuation, band, product — is standard remortgage strategy a broker runs in one pass. (Renovated since buying? Documented improvements plus comparables make the revaluation case stronger still.)
Buy-to-let LTV: the different ladder
The most-searched corner of this topic, answered band by band. 75% is the buy-to-let standard — the market’s centre of gravity, where pricing is sharpest and choice widest. 80% LTV BTL is genuinely available — a healthy set of lenders, a modest rate premium — and it’s the realistic ceiling for most. 85% exists at the specialist end: fewer lenders, meaningfully higher rates, tighter property criteria — placement territory. 90–95% BTL effectively doesn’t exist; the occasional exception is priced for curiosity, and the searches hunting “highest LTV buy-to-let” should hear the honest ceiling: 85%, with 80% the practical answer. The wrinkle that trips landlords: the rental stress test often binds before the LTV does — a lender happy at 80% LTV still caps the loan where rent covers stressed interest by 125–145%, so in lower-yield areas the achievable LTV is whatever the rent supports, not the brochure figure (the interest-coverage mechanics, including the gentler company-borrower test, are in our limited company BTL guide). Same ladder applies to BTL remortgages, where capital-raising to 75–80% funds the next deposit — portfolio-building’s standard engine.
High LTV and negative equity — the edges of the scale
Above 95% sits scheme territory (the genuine 100% routes — track-record products, family-backed structures), and below the waterline sits negative equity: LTV above 100%, owing more than the home is worth. Worth demystifying: it harms only when it meets a forced move or remortgage — sitting tight and repaying restores equity month by month, and lenders generally allow product transfers regardless of LTV, so nobody is forced onto punitive rates by paper losses. Regulated protections around arrears and forbearance apply throughout (the MoneyHelper service is the government-backed free guide, and any adviser or broker should appear on the FCA register). The through-line of the whole page applies at both edges: LTV isn’t a verdict, it’s a dial — and almost everything you do with a mortgage, from the first deposit to the last overpayment, is turning it.
The bottom line
LTV is the mortgage market’s master variable: calculated in ten seconds, priced in bands, recalculated in your favour at every remortgage, and movable — by overpayments, valuations, gifts and timing — in ways that repay attention better than almost any other financial fiddling. Learn your number, know your nearest boundary, and check both every time your deal ends: the borrowers who pay the least aren’t the ones who found a magic lender; they’re the ones who showed up one band lower.
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Loan-to-value: FAQs
What is LTV and how do I calculate it?
Loan-to-value is your mortgage expressed as a percentage of your property’s value: loan ÷ value × 100. Borrowing £225,000 against a £250,000 home is 90% LTV; the deposit is the mirror image (10% there). At purchase, lenders use the lower of the price and their valuation; at remortgage, they use your current balance against the current valuation — which is why LTV usually improves over time without any deliberate effort, as repayments shrink the loan and prices typically grow the value.
What is a good LTV?
Lower is cheaper, but “good” is contextual: 60% unlocks the market’s best rates; 75–80% is where most established borrowers and landlords sit with near-best pricing; 90–95% is completely normal for first-time buyers and still beats years of renting while saving in most markets. The practical answer: the best LTV is the next band boundary you can realistically reach — dropping from 91% to 90%, or 76% to 75%, reprices your whole loan, and that marginal step is worth more than distant aspirations toward 60%.
How is LTV calculated when remortgaging?
Current mortgage balance divided by current property value — both refreshed. Five years of repayments on a typical £200,000 loan clears £20,000+ of capital, and house-price growth compounds the effect, so buyers who started at 90% commonly remortgage at 75–80% and collect one or two bands of cheaper pricing automatically. The value comes from the lender’s remortgage valuation (often automated): know your street’s recent sold prices, and if the figure lags reality, an appeal with comparables — or a modest pre-remortgage overpayment — can find the next band.
What’s the maximum LTV for buy-to-let?
Practically 85%, realistically 80%. The BTL market centres on 75% LTV where pricing and choice are best; 80% is widely available at a modest premium; 85% exists at specialist lenders with real rate costs; and 90–95% buy-to-let effectively doesn’t exist. Note the second constraint: the rental stress test (rent covering stressed interest by 125–145%) often caps the loan below the headline LTV in lower-yield areas — so the achievable figure is whatever the rent supports, which is frequently the binding limit rather than the band itself.
How much does LTV affect my mortgage rate?
More than any other factor you control. Lenders publish separate rate tables per band, and the spread from 95% to 60% typically spans around a full percentage point — roughly £115 a month, or £7,000 across a five-year fix, on a £200,000 loan. The effect is stepped, not smooth: 76% prices as 80%-band, 75.0% prices as 75%-band, so proximity to a boundary matters more than the raw number. Every band you drop at remortgage time is a permanent repricing of the entire balance.
How can I lower my LTV?
Four levers, in order of typical impact: overpay — especially a targeted lump sum that drops you across a band boundary just before remortgaging (the highest-ROI overpayment available); let time work — repayments plus house-price growth do most borrowers’ band-dropping invisibly; evidence your true value — appeal a lagging valuation with local sold-price comparables, particularly after documented improvements; and at purchase, a slightly larger deposit (savings or a documented family gift) that clears the next boundary. Check your position against the bands at every deal end — it’s the five-minute habit that compounds.
- Bank of England — Bank Rate (the base that mortgage pricing moves with)
- ONS — UK House Price Index (tracking the value side of your LTV)
- MoneyHelper — the government-backed free money guidance service
- FCA Register — verify any lender or broker’s authorisation
Important information
nextmove is an introducer, not a lender or adviser. This article is for general information only and does not constitute financial advice. Rates shown are illustrative to demonstrate band structure, not offers; actual pricing varies by lender, product and circumstances and changes frequently. LTV bands, criteria and figures are indicative as of July 2026. We introduce you to FCA-regulated, whole-of-market mortgage brokers who can advise on your individual circumstances, and we may receive a fee or commission for doing so.
Your home may be repossessed if you do not keep up repayments on your mortgage.
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